Stream Finance Freezes User Activity Amid Significant Asset Loss
Decentralized finance platform Stream Finance has suspended all deposits and withdrawals following a reported $93 million loss in managed assets. The company disclosed the incident on Monday, stating that an external fund manager overseeing its investment strategies first identified the loss on Sunday.
Actions Taken by Stream Finance
Stream Finance announced it has hired legal counsel from Perkins Coie to assist with the ongoing investigation. The platform is in the process of withdrawing all liquid assets and said it would provide additional updates to users as information becomes available. In the meantime, the suspension affects both new and pending transactions.
XUSD Stablecoin Depegs Following Loss
The platform operates a yield-focused service that includes a collateralized stablecoin named Staked Stream USD (XUSD). Prior to the official announcement, XUSD had already started trading below its dollar peg. According to CoinGecko, the price of XUSD dropped to $0.51 amid community concerns about withdrawal issues and a lack of communication from the team.
Transparency and Risk Considerations
On Friday, Stream Finance addressed user queries about discrepancies between its reported total value locked (TVL) and figures shared by the data aggregator DefiLlama. The Stream Finance team asserted that DefiLlama does not count recursive looping strategies as TVL, leading to a visible difference between user deposits and funds deployed in protocols.
- User deposits reportedly stood at approximately $160 million, while total assets deployed across strategies were about $520 million.
- Industry stakeholders emphasized the importance of understanding how protocols generate yield and the risks tied to complex DeFi strategies.
The investigation remains ongoing, with no timeline yet for the resumption of deposits or withdrawals.
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